Industry News

5 Trends to Look Out for in UAE Facility Management Market

UAE facility
management market is soon becoming a hot topic in the eyes of a lot of
Gulf-based business leaders, and the origin to this topic is very interesting
in itself. The stupendous decline in oil prices and almost overnight erosion of
liquid capital following the final vestiges of the 2008 global financial crisis
severely impacted the GCC countries, not just economically, but mentally and
socially as well. The groupthink quickly came to the conclusion that the
sea-change in energy markets required proactive, pragmatic thinking, rather
than the simple reactive game that high oil prices had led them to play over
the past 50-odd years.

Energy based
economies, whether Venezuela, Nigeria or Russia, had all been crippled
severely, and the GCC was haemorrhaging money. A decision was made,
individually in all GCC countries but with the same conclusion in mind: the
economy had to change and the starring role of energy assets in the economy
would have to change with it. In this dramatic situation, the choice was made
to leverage the country’s impressive infrastructure investments to switch to a
services-oriented economy.

Tourism, real
estate, healthcare and education would be the new pillars on which to build a
new kind of economy, one where energy would play a supplementary role. TechSci
Research brings you the latest on the UAE facility management market, one of
the major successes of the UAE government over the past 5 years or so, and how
it can act as a model for other service-sector based developments across not
just the country, but across the GCC countries.

The UAE Facility
Management Market Size, in terms of value, has experienced double digit growth
over the past half-decade or so, from just over $6 billion in 2011 to $11.26
billion in 2016 with a y-o-y growth rate ranging from a high of 16.25% in 2013-2014
to a low of 11.65% in 2012-2013, which is extremely impressive, to say the
least.

TechSci Research
experts predict that the market for UAE facility management services will
continue to grow over the next 5 years, even if not perhaps quite as rapidly.
The figure being provided for the 2021 fiscal cycle is $17.41 billion, which
will make the growth story of the UAE facility
management market all the more impressive.

Another interesting factor behind the UAE facility management market is the type of companies
operating in the market. Leading players in the UAE facility management market include Emrill Services LLC., Imdaad, Farnek Service LLC, EFS
Facility Management Services and Khidmah L.L.C, among others. Most of the major
UAE facility management companies are indigenous, and a majority of them are
Dubai based.

This implies that not only are the companies
able to better understand the needs of their customers, but also that many of
the companies are in their home market for the long term, which would imply
more stability and better chances of consolidation, which would further the
chances of witnessing growth in the market.

Companies operating in the UAE facility
management market are expected to consolidate as Tier-I and Tier-II companies
expand further through merger and acquisitions. For instance, in 2017,
UAE-based facilities management (FM) provider, Imdaad announced investment
of USD16 million for the acquisition of small players. Many of the companies
set up and operating in the UAE are looking towards long term global and local
cues to help them make informed business strategy decisions.

2)Robust Investment in
Construction

The future for the UAE facility management
market looks just as bright as its contemporary history. Construction projects
worth $ 629 billion are expected to be completed in UAE by 2021. Upon
completion, these projects will pave the way for further growth of facility
management services in the country. As mentioned previously, shrewd companies
operating in the market are already starting to evolve their long-term plans to
correspond with the major indicators being witnessed in the overall economy of
the UAE.

Construction sector spending in the UAE has
been stable and robust, if not quite as phenomenal as what is being witnessed
in the UAE facility management market. Construction
spending has grown from $ 37.68 billion in 2012 to $ 41.58 billion in 2015. The
CAGR over the years 2012 to 2015 has been slightly under 3.5%, and is following
UAE’s GDP growth rate, a welcome sign given that investments are set to
increase given a strong run by the economy.

As global
demands pick up and if all prices stabilize as the markets clear, a strong GDP
showing will provide a major boost to UAE’s construction spending, which will
eventually spur the UAE facility management market.